It’s awful, I live in a rural area and many families have to sell chunks of their land off every few years just to afford the property tax and eventually they are left with nothing. As much as I hate the income tax, at least you are guaranteed to afford it.
Well in Missouri property tax pays for “for schools, law enforcement, city administration and other important local services”. Tax rates vary per state. Also, you can see if you qualify to not pay property taxes after a certain age. Or you can find yourself an island no one has claimed.
It's still not right. The goverment already takes so much of our money and spends it on things we want nothing to do with. We would be happy with our taxes going to our communities but guess what most of our taxes do not so they have to have the power to take away our property if we cant pay. Property we were told "we own"
**Important Note:** You have to specifically let the bank know that "$10" is going towards _principle_ payment, not towards _interest_ ! All the best 🤑
I believe bc the interest is the part that is always in their interest... BUT the principle... is in OUR INTEREST. It's basically like there are 2 accounts adjoined together. Make sure your part is getting that extra payment!
@eazyeighty5590 I believe it's due to how the interest is calculated. Not exactly sure how it is, but the way payments are applied it's like 99% of it goes toward the expected interest, while the 1% goes toward the principal. So something like $1,999 to interest, $1 to principal. With that in mind, if you put money towards the principal, it changes how much interest you are going to pay since the principal balance is being paid down faster than expected. Just in case, while I don't TOTALLY understand it, I have had clients make payments to loans and specifically noted "Apply to principal". So if the wealthy folk are doing it, it's likely a good idea to emulate it (if you've the money to spare).
The basic math of ($2,873 x 12) x 30 = $1,034,280. So the bank doubles the money that they literally printed out of thin air. This financial system is criminal.
@thisisdafunk Sure, if you like paying monthly mortgage payments forever. I'd rather get them paid fast so I can focus on super high insulation, triple pane windows, electric heated floors and on site solar PV.
According to Robert kiyosaki being in debt IS the way to go. Use debt to get rich and pay little in taxes because you are using all the money you spend to fix the houses as tax write offs. Step one, buy house, step two fix it up and SAVE YOUR RECEIPTS to give to an accountant then you are on your way to becoming wealthy.
Make sure to mark that extra money as a principal payment! A minute YT short does not provide adequate info on how these payments can be allocated if not marked correctly and how each servicer can be different. Always make sure to clarify or if you mail a check mark it accordingly or if online make sure it’s marked as principal only as well. There is usually a separate box or drop down to add in the extra amount 😅
Guess it works like student loans my monthly payment was $600 I was putting an extra $40 made sure I marked that $40 check towards the principal so that all of the $600 would go to the actual loan reducing my interest they even tried to lower my monthly payment I said no thank you how fast my loans were being paid off I was shocked a lady who was a retired accountant gave me that advice she was mean but I listened and appreciated that advice she did not have to give me.
You should’ve waited to pay it off , with the whole loan forgiveness 🐂 💩 that our so called president ( he only tries to play one on tv ) is still trying to get it passed.
Note: this is only true if you have a high interest rate. If you bought your house in 2020 when rates were like 2.5% it's better to invest your $10/day pretty much anywhere else.
@@lauralarrabee7870 correct. As Amorted most of the 1st third of monthly payments are interest. 2nd 3rd is closer to 50:50. Last 3rd is mostly principle.
@@gedwardnelsonignorant. The market was crashing. Covid stabilized it, not trump. Just like when he claimed gas was so low and correlated it to him being in office instead of the fact that no one was driving and the insurance companies gave us all money back because no one was driving😂
Compound interest should be illegal. 10% flat fee for doing basically nothing at all is huge money for a bank and more than they deserve. Biggest scam ever. Remortgaged every 5 years with interest loaded up front. Just sickening.
Erika, $10 dollars extra a day equals $300 extra a month. Where am I going to get that much money on top of the $2,873 a month payment? Looks like I'm eating rice and beans every day for the next 23 years.
Yea just take a 4th job. It is that simple. and rice and beans? Lol more like water from the river and tree bark. And don't even think about sleeping. You can sleep when you have that heart attack in 23 years.
Unfortunately, this isn’t something taught in school. Nothing useful is. And obviously not a lot of people know it otherwise this video wouldn’t have been made.
Completely disagree, most kids just don’t pay attention or don’t care at all. CA for example requires all HS students in public schools learn economics for a semester. That alone teaches you some basics of business, how to write a check, basics of the stock market, ect. It’s literally a requirement by schools.
@@Scarface_445 im not from CA so that might be the difference, but I have taken a state mandated economics class and it did not teach any of these things that you have listed nor did it teach anything actually useful
@@someoneyoudontknow7705 When I went to high school some years ago, even then we were required to take an economics course our senior year. Which of course covered all the different types of interest like simple and compound. If you don't know this out of high school, you were failing your classes with low grades. It always amazes me the amount of people who can't remember what they learned in High school and they have the gal to say that they learned nothing. When it's been there the entire time... they just didn't care enough.
This won’t be popular but the “Not taught in schools” excuse is so old. We literally live in a world full of free information. It legit takes 1 second to google or youtube “what to keep in mind when buying a home” or “what is interest on a mortgage”. The amount of videos that go viral based on the traps of mortgage or credit card interests rates and those extreme examples with people paying 1k plus in interest on a car payment. People need to take accountability in their own knowledge and stop relying on other people to do it for them
Anyone can pay off a mortgage -- or any loan -- in any number of years. Just a matter of giving back all the money that was borrowed. It's really basic logic.
But! He still pays taxes yearly and after the house is paid off the taxes usually double so you're still paying a monthly and never get rid of that shackle!
@@yourfriend4170 Or a wife. He bought the house as an anniversary present for his parents. He paid the mortgage. He split everything else with his father.
Yep and when going to get a house, car, boat, atv any loan refinance with your credit union because ask if you can get a rebate for using their financing then refinance to get a lower interest rate You can also get pre-approval from your credit union so when you go for a loan you can say i already have this interest rate which is usually much lower than regular bank rates unless they are offering a limited time low rate. Then tell them they can beat that rate or you will fax the purchase order to get your credit union to get the loan
@@kis4beauty they are all in it to make money but credit unions charge less to get more business and their model is a COOP which means its members are "owners" probably 0.0000000000001% owners so they can charge less. And generally, the top workers/owners take less in salaries and benefits compared to all other banks, so they pass that saving on to us.
your mortgage is already paid for in full when the company transfers the debt to the servicing company. Banks discharges ALL debts yearly. They have to file with the IRS by Mar 31. Read your securities contracts.
A lot of them do, yes, but some do retain all or some of their mortgages to service themselves. If it’s important to you, be sure to ask upfront who they sell to & who services.
Yes but the most people don’t know the trick of making bi-weekly payments. Even if you didn’t pay any extra, that would shave some years off of your loan. Throw in a couple hundred extra toward the principal on those bi-weekly payments and it’s even better.
@@mamabar6811 I guess what I'm thinking is that a home purchase is usually the largest financial commitment people will make in a lifetime. The extra put toward paying down the loan SHOULD be known when going in. If the lender doesn't tell you..an advance exploration of the particulars would be a very good idea.
*paying extra towards the principal shortens the life and saves money. If you don’t specify the bank won’t apply the money in your favor. They tried to play me a few times but not doing what I asked and fortunately I checked my receipt.
Put at least 20% down to avoid PMI, don’t refinance unless you get a 1% reduction in interest rate as Amortization schedule resets on refinancing (biggest scam ever) in short buy the house you can afford not the one you want to impress people.
They don't care if you know. My lender actively encourages extra payments and includes a separate line item for it on the web form and an interactive calculator to see how early your payoff will be.
Give up the daily Strarbucks/Dunkin Donuts, the daily lunch at the pizza shop, the daily cigarettes, the daily Amazon shopping, and walla, you can make extra payments to your mortgage....I bought my house 10 years ago, and I am 15 years ahead already, and am scheduled to pay off the 30 year loan in 2-3 years.
$10 a day in just ~1 more hour at minimum wage (in Ontario, Canada minimum wage is $16.55/h and about to go up to $17.20/h in October but the monthly mortgage is ~$3,400/month for 25 years mortgage)
@@parinazaz4044 I would pay the monthly amount and then throw extra money towards the principle before the next monthly was due. The interest balance decreases as you pay down the principle.
@@RD-wn9iwNah man, 30% taxes is fukn crazy. Community college is almost free in the US, kids just like to go to big name schools and party. I’d rather pay for college in cash then pay 30% taxes for the rest of my life. 😬
Most people already know this. The more you pay the less interest you pay. 10$ per day sounds cool but is equal to more than $300 per month. Pay off the whole house right now you save 2million right now on a 1 million house.
@FlamingFalconMan Not true. Until more recently house interest rates were actually even higher than they were now. It is only recently did it ever drop to the craziest list it ever had I the history of mortgages in the U.S. and that Covid levels of disruption. It was only for a vert brief moment did that really make much sense since most people don't end up investing the difference especially.
The really sad thing is the majority of people don't know this because they were never taught how interest works. This, and a few more basic home ownership & economics things be taught high school.
Stability and timing is the reason. My home will be paid off a few years before I retire because im throwing an extra $300 per month on the principal. I max my Roth IRA and put in 13% in my Roth 401k and increase it with every year I get a raise. It's a balancing act.
Congrats! Knowing what fractional reserve banking is makes you more knowledgeable than 99% of the population. Unfortunately it also puts you at higher risk for depression especially if you also understand debt-based currency and central banks. The Monetary Trifecta! I've known about them for about fifteen years and the only thing it has done is eliminate any fear of death.
They also have been paid in full for your mortgage less than a year after you got it. They sold off the debt and are paid out. 2 years into a 5 year term, ask for the chartered accounts stamp on a letter proving they still own your mortgage. Mortgage - death pledge. Hilarious.
Most people don’t know how paying off just a little bit helps a ton in the long run. Just because you and me already know this doesn’t mean it won’t help someone else. Problem is none of this is taught to us in school.
@@theysaidnewzealand huh? Knowing this does not make me or anyone else smart. I also never claimed I am one of the few people to know this. Putting words into my mouth that I never implied nor said is really telling of you.
The general advice us to make an extra payment per year. Shaves tons if inters and time off. That said, you need to make sure a. your contract allows and b. it goes directly towards principal.
@@wiseforce7045it used to be normal for there to be a clause for early payoff. However, the majority of places no longer do this. It can’t hurt to ask if they do, but be sure to read *everything* they give you before you sign. It will show in there somewhere verbiage to the effect that “there is no prepayment penalty” if they allow for early payoffs.
@edennis8578 Yes, I used bi-weekly payments as well. You're actually making 13 monthly payments every year. It's a good strategy for paying off the loan sooner.
That’s exactly what I was thinking 🤦🏼♂️. How can someone not know this, the less you owe the bank the less your going to pay because your charge a 6.6 interest rate on the principle. Maybe people might not know that they can pay extra on the principle every month or yearly and they think it’s lock in but that is why they should ask it’s that simple.
Well, it's because one will be given the impression tha you can't pay more than the amount agreed to be paid by the agreed pay period. Logically, it seems you should but there's a lot legal jargon and circumvented explanations that are perplexing to the common everyday person. It sounds crazy to me but paying my credit card bills on time was actually hurting my credit score as they weren't able to charge me compound interest for an extended payment plan.
A lot of people think they are saving money on interest but they don’t know the concept of “Time Value of Money”. The bank will gladly take your money sooner so they can lend it out to someone else. Meanwhile whatever you pay back sooner, you could have spent/invested. Not saying that paying off your mortgage sooner isn’t a good idea (I am too). But there is opportunity cost on your side and the Bank literally does not care what you do.
If you can afford the payments, you can also go for a 15 year mortgage instead of a 30 year one. Shorter time period means less interest, but with fewer payments you have to pay more in each one.
Yes BUT if u get in a financial bind it’s nice to be able to make a smaller payment if u need to for awhile .. we always got the 30 yrs but paid double payments ..
It is better to just pay more each month on the longer term mortgage or loan on my opinion. If you do get into a bind financially you can pay the lower monthly payment for a while. Paying more on a longer term loan with no early payoff restrictions gives you more flexibility.
Then the monthly payment will be 3,945 month without taxes and insurance. The original scenario didn’t include a down payment so there would be pmi as well.
@@kelleybuell5582 That is my actual opinion too. Get the longer term, but plan to pay it off faster. The shorter term might work for people who are confident they can make the payments, but lack discipline to make additional payments without seeing it listed on the statement, or maybe there is some tax or other accounting benefit from having the shorter term with higher set payments.
Drives me nuts! I’ve been banging on about overpaying and or fortnightly payment periods in the UK. Surprise: the banks seem quite deaf to the suggestion. Well done Erika 😊
You'll also want to apply that additional amount to the principal payment. You can also at least pay one additional payment a year (toward principal) to help pay it down. Sometimes that's another way to look at it. So many ways. I wish more people knew this but I tell everyone I know. And most lenders I've worked with have given me this information as well.
I worked with a housekeeper who drove an old beat up truck. Never dyed her hair. Liz sold stuff at estate sales as a side hustle. All the girls laughed at her look. One day Liz came into work and told me she paid off her 65 thousand dollar house in 3 and a half years!!! I was so proud of her! We live in the midwest.
My mortgage company has a spot to pay extra directly on your principal right there on their website. Log in select make a payment and you can choose, full payment, principal only payment and escrow payment. I’ve paid extra on principal and even escrow when my insurance premium has gone up.
2nd time I heard someone mention escrow. I only know escrow when talking about attaining lawyers as I was a legal secretary. What does it mean for home ownership? 🤔
They also don't tell you anything about how escrow works. When I was a first-time home buyer, nobody told me about escrow. My real estate agent didn't say anything, the bank didn't say anything. Nobody told me a thing.
What they don’t tell you is that a promise to pay is the same as actual payment. So when you sign the loan promising to pay it back, legally it is ALREADY PAID.
I checked the math. Instead of doing this, if I invest $300 per month (which is $10 per day) into S&P500 and the returns from that will be ~228K in 23 years. Assuming an annual income of 100k, my tax would be 28k which still leaves me with 200k.
The thing is it's not 100% and with taxes and inflation it will be less and u don't know exactly how that index will do in an ever changing economy... Specially one driven in technology
But at the end of that 23 years, you would still have a mortgage balance of $180k. That would leave you with $20k after paying off that mortgage. Not that much of a difference given the extra risk. The worst 20 year S&P 500 return in the past century was 2% annually. It's possible you would only have $100k after 23 years of investing, not $228k. Then again the best 20 year period would produce $800k in investments, so you're mileage would vary.
Here’s a suggestion: Buy a home that is not a mini mansion. There are lots of houses that aren’t in the trendy areas and need some tlc. But, your monthly payments will probably be reasonable and you can choose how expensive or frugal your repairs and upgrades will be.
Even If you pay off your mortgage in a shorter period of time, the lender will still make money from the security you created when you signed the initial contract for at least another 30+ years. Do an independent audit and see the revenue that was actually made from the transaction if one is skeptical. NO attorney will ever tell you that!
An extra $10 a day is $3650 annually, $36500 in ten years, and $73000 in 20 years. But, this isn't some big secret; my elementary education uncle understands this.
The homes you used 15-year mortgages on, were they rental properties or personal? I can understand using a 15-year fixed on a personal home, but with rental properties, that extra money eats into your profit, profit you could be using to put into another property.
$10 a day!?! So an additional $3000-3100 a month. Yes it will help you pay it off faster but not many people can afford to pay $6000 a month to their mortgage.
My mom was a loan officer, and she taught me this when I bought my first house back in 1998. Also, you don’t have to wait until your due date to make your monthly payment in one lump sum. I made a payment on my mortgage every payday. As someone else mentioned, you do need to make sure the bank knows how much is going toward principle and how much is going toward interest.
News flash - banks actually do want you to know this. Repaying the principal just means the bank has more capital to turn around more loans. Banks make way more money way faster on FEES than they do on your interest over 30 years.
For anyone curious this applies to all lines of credit... Not just a mortgage. Auto loan: pay more than your payment Credit cards: idealy pay off in full or more than the minimum payment
I got a deal: 4% fixed, 30 yrs, but my 1,000 sq ft was 20 grand. 😱 Nope, not paying it off early cause I have student loans with much higher balances and much higher interest rates ❤ Im laughing my way to the bank every month with a $107.25 payment
@@davidfredrick It's more about 10 years of deferred interest. My private student loan was $10G at 12% fixed in 2014. I made zero payments while in school. I have many other student loans, but this one private loan is my priority. Highest rate, 2nd highest balance, highest monthly payment. And a snowball chance of being forgiven.
Actually, the interest is fixed and they have you pay the interest off first so as to make sure they get more money from you. Your first few payments are basically 100% interest, and you don’t pay off any of the actual mortgage itself until much later. (They have many graphs explaining this online.) You will barely save any money by only paying it off a little sooner, better to try and pay off as much as possible as quickly as possible.
@@someoneyoudontknow7705This pays the principle down and shortens the time you carry the loan. Paying $10 per day cuts the amount of time the interest compounds.
Additionally if you divide your payments up every week instead of monthly your interest payments will be less, then if you add any extra money to that payment, you can pay it off earlier than 27 years. But read those contracts throughly.
It’s called an amortization schedule and at first, more does go towards interest because the balance is higher. As you pay down the loan, a bigger chunk of your payment goes towards principle. But you’ll always get there sooner and pay less the more you throw at the principle mortgage
@@Raec123to add onto this, it’s impossible for 0% of the first payment to NOT go to the principle. If that were the case then the loan would be impossible to pay off with the minimum payment they give you because the interest accrued monthly is more than your payment. So for what OP said, any additional payment made for any payment will go to the principle assuming you haven’t missed any payments.
Granted, there are people who don't know you can pay off loans faster by paying more but to me, that's just stupidity. Also, saying if you "just" pay $10 more a day is freaking $300 more a month and acting like that's no big deal is ridiculous when the amount is already almost $3000/month. Must be nice to have that kind of money for housing
While I agree with your sentiment that it's difficult to come up with an extra $300/month. Change your mindset from "it must be nice to have extra money" to "what do I need to do to bring in an extra $x a month". I didn't have the extra money at first but after thinking strategically about what I needed to do, I started a side hustle, stopped spending on crap that I didn't need, and enjoyed free things around the community with my kids.
@@crystalg81 With enough "lifestyle creep," what was previously "an extra $300/month" ceases to be _extra_ money (no matter its source) - as the transition from renting a cheap apartment to mortgaging a $450K, single-family home would demonstrate.
A lot of them don't take into account that inflation is 2-3% at minimum each year so in 30 years the loan would be worth significantly less compared to if you throw all your money at it just to have peace of mind. An expensive as heck peace of mind.
ANY amount will help. Doesn't have to be $10 a day. Pay $10 a month if/when you have it. Every dollar of reduced principal is greatly multiplied in reduced interest in the future.
The video gives a terrible example but you can pay literally ANYTHING extra (even a dollar) and you are saving 30 years interest on that dollar. Pay $10 extra or $100 extra per month and watch the principal come down year after year. That's money you no longer have to pay interest on.
Make sure you read the terms. Some lenders put early pay off penalties in so they can still get more out of you if you try to pay off early. It's often worse with car loans as it is a known strategy to sign up for financing and then pay the car off completely at the first payment. People do this because some dealerships will offer a lower sale price if you take their financing.
I don’t think it’s about the Math. It’s more about people not realising they even have the ability to overpay without penalty. A lot of personal loans don’t allow that
It's not about ppl not knowing like you said it's simple pay more towards anything and you'll pay it off quicker. It's about ppl not being to to do it financially so they just don't
@@alfredjones4925 again, for a lot of people they don’t know you can repay mortgages. A lot of loans PENALISE you financially for paying off quicker. That’s my point
If you are able to pay 2800 than you can also pay 3100. You probably have to make 6000 bucks a month after taxes to make each of these payments reasonable. So these extra 300 are basically one hour of paid over time per week and packing your own lunch instead of buying something
Great advice! Even $100 a month can make a big difference. Some loans have a pre-payment penalty. Check in on that when getting a loan. FHA and VA loans are not permitted to have prepayment penalties.
Easy access to debt is absolutely necessary to become a developed country. If only wealthy children could afford college, and everyone needed to save 20 years to afford a home, our standard of living would be 10% of what it is today.
It’s not about the math…Many people are ignorant when it comes to finances in general. Many don’t even know the process to purchase brick and mortar which never truly own… Be the difference and Educate
The people who say 'You don't own your house outright if you have to pay taxes on it' usually don't own a house. When I am done paying off my mortgage (in 2 years and 18 years early due to excessive extra payments), my house expenses will be $400 a month for a 3 bedroom ranch with central A/C and garage.....show me a house for rent like that for only $400 a month, and I'll sell my house and move into it. When you rent, you are paying the taxes for the landlord/owner.
For those having a different mortgage amount, you need to make approximately 13 mortgage payments in a year. To save 6 - 7 years. That's an extra payment of principle and interest and does not include taxes and insurance.
That is about $300 a month on an already high payment. You can achieve the same results by making bi-weekly payments on your house or car. Here is the math: the payment is 2873.00, if you pay bi-weekly you will make a half payment every 14 day. Twice a year you get paid 3x in one money. This mean you will make 13 mortgage payment in a 12 month period. This also means you will have a full payment each year going toward principle.
You ACTUALLY OWN YOUR HOME AT CLOSING SIGNING. The Bank acts as a Fudiciary Trustee and accesses you Cestique Trust for the purchase amount. The Banks commit fraud by making you pay the money and interest.
I started out with a 30 year mortgage. A friend then told me that I can afford the extra amount for a 15 year mortgage. I changed it to a 15 year mortgage and finished paying the house in much less time. It really was not a bother.
Correct. If you invested the money and got 9% returns, you could pay it off 19 months earlier and save an extra $3k in interest. But as you can see, the difference isn't much and your investment returns aren't as guaranteed as simply paying off your mortgage early.
Im sure if you're purchasing a house, this info is not new! The issue is that people are struggling to pay their mortgages, therefore, they have no extra $10/day
@@jtowensbyiii6018 that is not universally true. I've seen mortgage contract terms that allow the mortgagor to apply the funds as they see fit, which is not limited to arrearages.
Great advice! My mortage was 450k and i paid an extra 450k each day and now i own the house after one day thank you for financial afvice 🙏
Banks hate this one simple trick...
no house no mortage LIFE HACK
😂😂😂
😂😂😂😂😂😂😂
I had to reread this comment a few times 😂😂😂
The extra $10 a day isn't the problem, the initial $2,873 is.
Please.,What do you mean ?
@@wiseforce7045its a joke about how they cant afford to pay that much a month
@@wiseforce7045 Buying a $450k house. That's the mortgage.
@@wiseforce7045the rate is too high.
Why are you even buying a house if you can't afford to pay 2.8k cachhiing!
Sad thing is, the house is never all yours-even paid off. Property tax is theft.
It’s awful, I live in a rural area and many families have to sell chunks of their land off every few years just to afford the property tax and eventually they are left with nothing. As much as I hate the income tax, at least you are guaranteed to afford it.
Well in Missouri property tax pays for “for schools, law enforcement, city administration and other important local services”. Tax rates vary per state. Also, you can see if you qualify to not pay property taxes after a certain age. Or you can find yourself an island no one has claimed.
Good thing some of us are completely exempt from property taxes 🤌🏻👌🏻
@@Starsview72- ours tells you what it pays for schools, police/fire, roads, library, seniors, children, etc. etc. it supports your community.
It's still not right. The goverment already takes so much of our money and spends it on things we want nothing to do with. We would be happy with our taxes going to our communities but guess what most of our taxes do not so they have to have the power to take away our property if we cant pay. Property we were told "we own"
**Important Note:**
You have to specifically let the bank know that "$10" is going towards _principle_ payment, not towards _interest_ !
All the best 🤑
Why not towards interest?
Exactly...the principal is what the interest is figured off of ...if you apply it to the interest your principal doesn't change hardly at all.
I believe bc the interest is the part that is always in their interest... BUT the principle... is in OUR INTEREST.
It's basically like there are 2 accounts adjoined together. Make sure your part is getting that extra payment!
@@eazyeighty5590 Because the interest in based on the principal.. The quicker you pay down the principal, the less interest you'll pay
@eazyeighty5590 I believe it's due to how the interest is calculated. Not exactly sure how it is, but the way payments are applied it's like 99% of it goes toward the expected interest, while the 1% goes toward the principal. So something like $1,999 to interest, $1 to principal.
With that in mind, if you put money towards the principal, it changes how much interest you are going to pay since the principal balance is being paid down faster than expected.
Just in case, while I don't TOTALLY understand it, I have had clients make payments to loans and specifically noted "Apply to principal". So if the wealthy folk are doing it, it's likely a good idea to emulate it (if you've the money to spare).
The basic math of ($2,873 x 12) x 30 = $1,034,280. So the bank doubles the money that they literally printed out of thin air. This financial system is criminal.
All the while i dont make enough to afford the intial 2800 🎉
Banks don't print money
@@pauljansen6650 True, nobody does for mortgages.
@@TheRealHonestInquiry Agreed. There is no other option except lower your costs. Buy some land and build your own home.
Yes that is criminal, that's why so many criminals run and own America!!
Buy old and cheap houses...pay them off as fast as possible and renovate them in the first few years is my strategy.
Why pay them off, just use equity to put down on a new place as an investment, rinse and repeat. Make money now not later.
@thisisdafunk Sure, if you like paying monthly mortgage payments forever. I'd rather get them paid fast so I can focus on super high insulation, triple pane windows, electric heated floors and on site solar PV.
@@thisisdafunkno way , staying in debt isn't the way to go, being debt free is the way to go.
According to Robert kiyosaki being in debt IS the way to go. Use debt to get rich and pay little in taxes because you are using all the money you spend to fix the houses as tax write offs. Step one, buy house, step two fix it up and SAVE YOUR RECEIPTS to give to an accountant then you are on your way to becoming wealthy.
@@LP-MeAndMyShadow why can't you write it off just the same if it's payed off?
Make sure to mark that extra money as a principal payment! A minute YT short does not provide adequate info on how these payments can be allocated if not marked correctly and how each servicer can be different. Always make sure to clarify or if you mail a check mark it accordingly or if online make sure it’s marked as principal only as well. There is usually a separate box or drop down to add in the extra amount 😅
Any extra payment over the monthly automatically goes toward principal.
No it doesn't.
Guess it works like student loans my monthly payment was $600 I was putting an extra $40 made sure I marked that $40 check towards the principal so that all of the $600 would go to the actual loan reducing my interest they even tried to lower my monthly payment I said no thank you how fast my loans were being paid off I was shocked a lady who was a retired accountant gave me that advice she was mean but I listened and appreciated that advice she did not have to give me.
You should’ve waited to pay it off , with the whole loan forgiveness 🐂 💩 that our so called president ( he only tries to play one on tv ) is still trying to get it passed.
Yes it does. The interest is already allocated for the month so the residual allocates toward the principal.
Note: this is only true if you have a high interest rate. If you bought your house in 2020 when rates were like 2.5% it's better to invest your $10/day pretty much anywhere else.
Facts
Also the Bank has to approve payments to the principal. Some don’t
Yet continue to vote for Biden
@@lauralarrabee7870 correct. As Amorted most of the 1st third of monthly payments are interest. 2nd 3rd is closer to 50:50.
Last 3rd is mostly principle.
@@gedwardnelsonignorant. The market was crashing. Covid stabilized it, not trump. Just like when he claimed gas was so low and correlated it to him being in office instead of the fact that no one was driving and the insurance companies gave us all money back because no one was driving😂
$2,873 a month 😲
For 30 Years 😲
People are completely of control.
Compound interest should be illegal. 10% flat fee for doing basically nothing at all is huge money for a bank and more than they deserve. Biggest scam ever. Remortgaged every 5 years with interest loaded up front. Just sickening.
Erika, $10 dollars extra a day equals $300 extra a month. Where am I going to get that much money on top of the $2,873 a month payment? Looks like I'm eating rice and beans every day for the next 23 years.
Make more money 💰 🤑
Yea just take a 4th job. It is that simple. and rice and beans? Lol more like water from the river and tree bark. And don't even think about sleeping. You can sleep when you have that heart attack in 23 years.
Dave Ramsey approves the rice and beans diet 😂.
@@jenninemorel7693be more intelligent, grow an extra limb while you’re at it too 😂
Work that pole on the weekends!
Imagine buying a house and NOT knowing how interest works.
Unfortunately, this isn’t something taught in school. Nothing useful is. And obviously not a lot of people know it otherwise this video wouldn’t have been made.
Completely disagree, most kids just don’t pay attention or don’t care at all. CA for example requires all HS students in public schools learn economics for a semester. That alone teaches you some basics of business, how to write a check, basics of the stock market, ect.
It’s literally a requirement by schools.
@@Scarface_445 im not from CA so that might be the difference, but I have taken a state mandated economics class and it did not teach any of these things that you have listed nor did it teach anything actually useful
@@someoneyoudontknow7705 When I went to high school some years ago, even then we were required to take an economics course our senior year. Which of course covered all the different types of interest like simple and compound. If you don't know this out of high school, you were failing your classes with low grades. It always amazes me the amount of people who can't remember what they learned in High school and they have the gal to say that they learned nothing. When it's been there the entire time... they just didn't care enough.
This won’t be popular but the “Not taught in schools” excuse is so old. We literally live in a world full of free information. It legit takes 1 second to google or youtube “what to keep in mind when buying a home” or “what is interest on a mortgage”. The amount of videos that go viral based on the traps of mortgage or credit card interests rates and those extreme examples with people paying 1k plus in interest on a car payment. People need to take accountability in their own knowledge and stop relying on other people to do it for them
My uncle did this decades ago. He paid off a 20 year mortgage in 13 years.
❤❤❤❤❤
Anyone can pay off a mortgage -- or any loan -- in any number of years. Just a matter of giving back all the money that was borrowed. It's really basic logic.
But! He still pays taxes yearly and after the house is paid off the taxes usually double so you're still paying a monthly and never get rid of that shackle!
He probably didn’t have kids 😂
@@yourfriend4170 Or a wife. He bought the house as an anniversary present for his parents. He paid the mortgage. He split everything else with his father.
Go Sister!!!
That's how I demolished my credit card debt after college. Never had debt again.
This is kind of common sense for homeowners. My mortgage company's website even promotes this with pop ups every time I make a payment.
Over pay each month ,I paid off my mortgage by time I was 37 😊
How old were you when you got the mortgage?
@@SeniorSundayI’m betting this person was older then 7.
My mortgage is at 3%. I ain’t paying that off early. I’ll rather stick my extra money in the stock market where I can offset that 3% and then some.
@@Fishfood007and that still doesn't give context.
@@SeniorSundaywell u gotta be 18 so I'm guessing that age 😂
Credit unions tend to be less vicious than banks. See about joining a credit union and financing your mortgage and other loans with them.
This is the way😊
Exactly
Yep and when going to get a house, car, boat, atv any loan refinance with your credit union because ask if you can get a rebate for using their financing then refinance to get a lower interest rate
You can also get pre-approval from your credit union so when you go for a loan you can say i already have this interest rate which is usually much lower than regular bank rates unless they are offering a limited time low rate. Then tell them they can beat that rate or you will fax the purchase order to get your credit union to get the loan
I thought so too until I saw the backlash regarding mortgages and Navy Federal. All financial institutions are in it to make money period!
@@kis4beauty they are all in it to make money but credit unions charge less to get more business and their model is a COOP which means its members are "owners" probably 0.0000000000001% owners so they can charge less. And generally, the top workers/owners take less in salaries and benefits compared to all other banks, so they pass that saving on to us.
My father did this twenty years ago. His house was mortgage free when he passed.
Smart old man!
Wow lucky you...
@@calbeebbqbbq😮
Now your good huh
@@calbeebbqbbq
This should be common honestly? Parents should be able to pass things down to their kids. Or at least a very low mortgage.
Property tax should be paid proportional to the equity owned… so the bank should pay out of its profits with no pass on allowed!
your mortgage is already paid for in full when the company transfers the debt to the servicing company. Banks discharges ALL debts yearly. They have to file with the IRS by Mar 31.
Read your securities contracts.
A lot of them do, yes, but some do retain all or some of their mortgages to service themselves. If it’s important to you, be sure to ask upfront who they sell to & who services.
@@DiamondsTakingShape 💯
banks cannot loan you there money or the money of depositors; so, who creates credit?
@@josiahmoss2269
The Source. YOU!
1099 OID (Original Issuer Discount)
It's pretty common knowledge that paying extra shortens the term and saves money.
Yes but the most people don’t know the trick of making bi-weekly payments. Even if you didn’t pay any extra, that would shave some years off of your loan. Throw in a couple hundred extra toward the principal on those bi-weekly payments and it’s even better.
@@mamabar6811 I guess what I'm thinking is that a home purchase is usually the largest financial commitment people will make in a lifetime. The extra put toward paying down the loan SHOULD be known when going in. If the lender doesn't tell you..an advance exploration of the particulars would be a very good idea.
*paying extra towards the principal shortens the life and saves money. If you don’t specify the bank won’t apply the money in your favor. They tried to play me a few times but not doing what I asked and fortunately I checked my receipt.
Put at least 20% down to avoid PMI, don’t refinance unless you get a 1% reduction in interest rate as Amortization schedule resets on refinancing (biggest scam ever) in short buy the house you can afford not the one you want to impress people.
They don't care if you know. My lender actively encourages extra payments and includes a separate line item for it on the web form and an interactive calculator to see how early your payoff will be.
Ahh, if only all lenders and real estate agents were this transparent and actually cared. Sadly, that's not how it is for everyone.
$2873 for a monthly mortgage payment is the crime here.
Semper Fi!
Semper Fi fellow Devil Dog!
$10 a DAY???That’s an extra $300 per month…how is this affordable for most people?
Give up the daily Strarbucks/Dunkin Donuts, the daily lunch at the pizza shop, the daily cigarettes, the daily Amazon shopping, and walla, you can make extra payments to your mortgage....I bought my house 10 years ago, and I am 15 years ahead already, and am scheduled to pay off the 30 year loan in 2-3 years.
$10 a day in just ~1 more hour at minimum wage (in Ontario, Canada minimum wage is $16.55/h and about to go up to $17.20/h in October but the monthly mortgage is ~$3,400/month for 25 years mortgage)
It's a damn shame that people don't understand how interest works. I paid off my mortgage 8 years early.
They dont want you to know is the problem. Its why schools dont teach debt. You just screwed immediately
How did you do it?
@@parinazaz4044 I would pay the monthly amount and then throw extra money towards the principle before the next monthly was due. The interest balance decreases as you pay down the principle.
6.6% mortgages should be illegal.
My student loan is around that number and there's nothing I can do.
@@palepants9475 that's shocking. Americans are better leaving USA to study in Europe. Would be cheaper. That is a big problem for America.
@@RD-wn9iwNah man, 30% taxes is fukn crazy. Community college is almost free in the US, kids just like to go to big name schools and party. I’d rather pay for college in cash then pay 30% taxes for the rest of my life. 😬
No. Inflation was running away and rates were raised to slow it. If rates were still 2 percent that house would cost you 600k.
My parents paid like 15% in the 70s/early 80s and they had excellent credit. Times change.
Most people already know this. The more you pay the less interest you pay. 10$ per day sounds cool but is equal to more than $300 per month. Pay off the whole house right now you save 2million right now on a 1 million house.
Most people dont know this i would say most people dont even know how a mortgage works
better to solidify that knowledge, most people forget
To be fair until recently.
It made more sense to have a larger mortgage and instead invest the money you’d use on repayments.
@FlamingFalconMan Not true. Until more recently house interest rates were actually even higher than they were now. It is only recently did it ever drop to the craziest list it ever had I the history of mortgages in the U.S. and that Covid levels of disruption.
It was only for a vert brief moment did that really make much sense since most people don't end up investing the difference especially.
Most people do not know this and don't even have a mortgage to begin with.
Very true. I’m paying extra $500 a month and will payoff my mortgage in 15 years instead of 30.
The really sad thing is the majority of people don't know this because they were never taught how interest works. This, and a few more basic home ownership & economics things be taught high school.
What's even sadder is that the vast majority of human beings can't afford something like this at all
It used to be taught. It was called Home Economics. It's harder to control informed & actually educated citizens.
@@patsy4959Facts!!!
S&P 500 averages +9% every year, so it's better to put your money in S&P than to try to avoid the 6.6% interest rate.
Yes I was thinking the same thing, why not just invest your money and get a better return on it rather than hurrying to pay off the mortgage.
Stability and timing is the reason. My home will be paid off a few years before I retire because im throwing an extra $300 per month on the principal. I max my Roth IRA and put in 13% in my Roth 401k and increase it with every year I get a raise. It's a balancing act.
I learned this the hard way with my first house.
Now I track my amortization schedule with highlighters and written goals!
The bank doesn't care if you pay off your loan early. They use fractional banking so the money isn't real.
Congrats! Knowing what fractional reserve banking is makes you more knowledgeable than 99% of the population. Unfortunately it also puts you at higher risk for depression especially if you also understand debt-based currency and central banks. The Monetary Trifecta! I've known about them for about fifteen years and the only thing it has done is eliminate any fear of death.
"Not Real" yet you can buy anything with it 🥴
Most people will never understand what you’re trying to educate their naive asses about…
They also have been paid in full for your mortgage less than a year after you got it. They sold off the debt and are paid out.
2 years into a 5 year term, ask for the chartered accounts stamp on a letter proving they still own your mortgage.
Mortgage - death pledge. Hilarious.
20% down and a 15 year fixed, if you can't do that as the minimum. You shouldn't be buying a home.
I paid off my 30 year loan in 14 years. NO REGRETS!
Wow. Paying a mortgage faster means you pay the mortgage faster. Better follow Erica for more tips like this!
Most people don’t know how paying off just a little bit helps a ton in the long run. Just because you and me already know this doesn’t mean it won’t help someone else. Problem is none of this is taught to us in school.
@HypocritesExposd Sure buddy you are one of the few smart people that know paying more means paying faster!
@@theysaidnewzealand huh? Knowing this does not make me or anyone else smart. I also never claimed I am one of the few people to know this. Putting words into my mouth that I never implied nor said is really telling of you.
@@HypocritesExposd Sure buddy
The general advice us to make an extra payment per year. Shaves tons if inters and time off. That said, you need to make sure a. your contract allows and b. it goes directly towards principal.
Are there cases in which you know it does not allow? that sounds like it should definitely be illegal and a forced exploitation and abuse of power
We paid two half payments a month instead of one full payment. Our mortgage was paid off 9 years early with no extra money.
@@wiseforce7045it used to be normal for there to be a clause for early payoff. However, the majority of places no longer do this. It can’t hurt to ask if they do, but be sure to read *everything* they give you before you sign. It will show in there somewhere verbiage to the effect that “there is no prepayment penalty” if they allow for early payoffs.
@edennis8578 Yes, I used bi-weekly payments as well. You're actually making 13 monthly payments every year. It's a good strategy for paying off the loan sooner.
Wait...
There are people out there who didn't know that paying off loans quicker means less interest?
That's literally basic common sense 🤦♂️
That’s exactly what I was thinking 🤦🏼♂️. How can someone not know this, the less you owe the bank the less your going to pay because your charge a 6.6 interest rate on the principle. Maybe people might not know that they can pay extra on the principle every month or yearly and they think it’s lock in but that is why they should ask it’s that simple.
It’s a frightening thought, but yes there are people out there in mortgage-land that don’t know this!
Well, it's because one will be given the impression tha you can't pay more than the amount agreed to be paid by the agreed pay period. Logically, it seems you should but there's a lot legal jargon and circumvented explanations that are perplexing to the common everyday person. It sounds crazy to me but paying my credit card bills on time was actually hurting my credit score as they weren't able to charge me compound interest for an extended payment plan.
Yes many people same as credit cards that’s why banks are so filthy rich
My personal loan apparently doesn't work like that, because I asked.
A lot of people think they are saving money on interest but they don’t know the concept of “Time Value of Money”. The bank will gladly take your money sooner so they can lend it out to someone else. Meanwhile whatever you pay back sooner, you could have spent/invested.
Not saying that paying off your mortgage sooner isn’t a good idea (I am too). But there is opportunity cost on your side and the Bank literally does not care what you do.
Banks WILL NOT ALLOW YOU to pay your mortgage daily!
If you can afford the payments, you can also go for a 15 year mortgage instead of a 30 year one. Shorter time period means less interest, but with fewer payments you have to pay more in each one.
Yes BUT if u get in a financial bind it’s nice to be able to make a smaller payment if u need to for awhile .. we always got the 30 yrs but paid double payments ..
And normally you get lower interest on 30year opposed to 15
It is better to just pay more each month on the longer term mortgage or loan on my opinion. If you do get into a bind financially you can pay the lower monthly payment for a while. Paying more on a longer term loan with no early payoff restrictions gives you more flexibility.
Then the monthly payment will be 3,945 month without taxes and insurance. The original scenario didn’t include a down payment so there would be pmi as well.
@@kelleybuell5582 That is my actual opinion too. Get the longer term, but plan to pay it off faster. The shorter term might work for people who are confident they can make the payments, but lack discipline to make additional payments without seeing it listed on the statement, or maybe there is some tax or other accounting benefit from having the shorter term with higher set payments.
Drives me nuts! I’ve been banging on about overpaying and or fortnightly payment periods in the UK. Surprise: the banks seem quite deaf to the suggestion. Well done Erika 😊
Have you had success with bank accepting fortnightly payments on mortgages in UK? Getting runaround
@@cmoore7669Sounds like they said the banks haven't been accepting that
You'll also want to apply that additional amount to the principal payment. You can also at least pay one additional payment a year (toward principal) to help pay it down. Sometimes that's another way to look at it. So many ways. I wish more people knew this but I tell everyone I know. And most lenders I've worked with have given me this information as well.
That's assuming you don't have an escrow account. If you do have escrow, you'll have to specify where the extra payment is to be applied.
I worked with a housekeeper who drove an old beat up truck. Never dyed her hair. Liz sold stuff at estate sales as a side hustle. All the girls laughed at her look. One day Liz came into work and told me she paid off her 65 thousand dollar house in 3 and a half years!!! I was so proud of her! We live in the midwest.
If you can‘t figure that out by yourself, you shouldn‘t buy one.
In other words, RENT.. Unless you’re flipping real estate, buying a house these days is a scam
Renting isn't always cheaper. When the demand is there, landlords can make a profit
Actually... The bigger the payments, the shorter time you're gonna pay, the lesser interest rates youd be paying.
That's what she's saying the video. She's just showing what just an extra $300 a month can do
My mortgage company has a spot to pay extra directly on your principal right there on their website. Log in select make a payment and you can choose, full payment, principal only payment and escrow payment. I’ve paid extra on principal and even escrow when my insurance premium has gone up.
You can also shop for a new insurance. Never accept the new premium if you can find a lower price
2nd time I heard someone mention escrow. I only know escrow when talking about attaining lawyers as I was a legal secretary. What does it mean for home ownership? 🤔
They also don't tell you anything about how escrow works. When I was a first-time home buyer, nobody told me about escrow. My real estate agent didn't say anything, the bank didn't say anything. Nobody told me a thing.
Can you tell us how it works please?
450k where I live would a HUGE house.
I cant imagine paying 2,800 a month for 30yrs
Yes the escow personnel that helped us closed on our home gave us this advice 👍
The cheapest financial advice. Is she even a lawyer
Seriously this info is needed, our family thanks you.
If you put $300/month into a retirement account for the same 23 years (assuming historical 8% average return) you'll have over $235,000
What they don’t tell you is that a promise to pay is the same as actual payment. So when you sign the loan promising to pay it back, legally it is ALREADY PAID.
I checked the math. Instead of doing this, if I invest $300 per month (which is $10 per day) into S&P500 and the returns from that will be ~228K in 23 years.
Assuming an annual income of 100k, my tax would be 28k which still leaves me with 200k.
I got 345k at 10.5%, minus 15% for taxes, $293,250. So an extra 130k. Definitely don't pay it off early.
The thing is it's not 100% and with taxes and inflation it will be less and u don't know exactly how that index will do in an ever changing economy... Specially one driven in technology
But at the end of that 23 years, you would still have a mortgage balance of $180k. That would leave you with $20k after paying off that mortgage. Not that much of a difference given the extra risk.
The worst 20 year S&P 500 return in the past century was 2% annually. It's possible you would only have $100k after 23 years of investing, not $228k. Then again the best 20 year period would produce $800k in investments, so you're mileage would vary.
@@kyleolson9636
What about compounding interest, "the rule on 72", on the investment.
Doesn't that mean your money doubles every 9 years?
Here’s a suggestion: Buy a home that is not a mini mansion. There are lots of houses that aren’t in the trendy areas and need some tlc. But, your monthly payments will probably be reasonable and you can choose how expensive or frugal your repairs and upgrades will be.
Never had a mortgage and haven't paid rent for over 30 years. Life is good!
It's nice when your parents give you a house, but for 99% of people, that isn't the case.
I own a house and 5 acres that is fully paid for.... but still rent a different house.
Even If you pay off your mortgage in a shorter period of time, the lender will still make money from the security you created when you signed the initial contract for at least another 30+ years. Do an independent audit and see the revenue that was actually made from the transaction if one is skeptical. NO attorney will ever tell you that!
An extra $10 a day is $3650 annually, $36500 in ten years, and $73000 in 20 years.
But, this isn't some big secret; my elementary education uncle understands this.
"Mortgage" is literally defined as a "dead pledge."
Before I started paying cash for my houses, I used to take out 15 year mortgages.
The homes you used 15-year mortgages on, were they rental properties or personal? I can understand using a 15-year fixed on a personal home, but with rental properties, that extra money eats into your profit, profit you could be using to put into another property.
Great info! Thanks for sharing. More young folks that are just starting out in adulthood needs to hear this
Finally some advise for the common man!! Not like we need to buy groceries or medicine or for gas!! 🙄🙄🙄
$10 a day!?! So an additional $3000-3100 a month. Yes it will help you pay it off faster but not many people can afford to pay $6000 a month to their mortgage.
My mom was a loan officer, and she taught me this when I bought my first house back in 1998. Also, you don’t have to wait until your due date to make your monthly payment in one lump sum. I made a payment on my mortgage every payday. As someone else mentioned, you do need to make sure the bank knows how much is going toward principle and how much is going toward interest.
News flash - banks actually do want you to know this. Repaying the principal just means the bank has more capital to turn around more loans. Banks make way more money way faster on FEES than they do on your interest over 30 years.
Rocket Mortgage offers terms of anywhere from 8-30 years. The less years, the more you save on interest !
For anyone curious this applies to all lines of credit... Not just a mortgage. Auto loan: pay more than your payment Credit cards: idealy pay off in full or more than the minimum payment
"You know our secret..who told you about this?" My math teacher when I was in 6th grade..think it was called percentages. Lmao!
I got a deal: 4% fixed, 30 yrs, but my 1,000 sq ft was 20 grand. 😱 Nope, not paying it off early cause I have student loans with much higher balances and much higher interest rates ❤ Im laughing my way to the bank every month with a $107.25 payment
But is your student loan amortized or simple interest?
@@davidfredrick It's more about 10 years of deferred interest. My private student loan was $10G at 12% fixed in 2014. I made zero payments while in school. I have many other student loans, but this one private loan is my priority. Highest rate, 2nd highest balance, highest monthly payment. And a snowball chance of being forgiven.
Actually, the interest is fixed and they have you pay the interest off first so as to make sure they get more money from you. Your first few payments are basically 100% interest, and you don’t pay off any of the actual mortgage itself until much later. (They have many graphs explaining this online.) You will barely save any money by only paying it off a little sooner, better to try and pay off as much as possible as quickly as possible.
There’s an option that says where that extra payment goes…it can go toward the principle amount owed, not the interest.
@@someoneyoudontknow7705This pays the principle down and shortens the time you carry the loan.
Paying $10 per day cuts the amount of time the interest compounds.
Additionally if you divide your payments up every week instead of monthly your interest payments will be less, then if you add any extra money to that payment, you can pay it off earlier than 27 years. But read those contracts throughly.
It’s called an amortization schedule and at first, more does go towards interest because the balance is higher. As you pay down the loan, a bigger chunk of your payment goes towards principle. But you’ll always get there sooner and pay less the more you throw at the principle mortgage
@@Raec123to add onto this, it’s impossible for 0% of the first payment to NOT go to the principle. If that were the case then the loan would be impossible to pay off with the minimum payment they give you because the interest accrued monthly is more than your payment. So for what OP said, any additional payment made for any payment will go to the principle assuming you haven’t missed any payments.
Better suggestion. Find the difference in payment between 15 and 30 year mortgage. Get the 30 year mortgage and pay the difference into mutual funds
Mortgage will go up periodically, taxes go up, home insurance goes up too....
The kicker is that the house is never truly yours. Not when you’re using this method to acquire and pay for said house, that is.
Its sad most people don't know that.
Yeah I didn't even know banks let people do this. Thought they'd make the terms against us because they want/must have that interest entire term
Granted, there are people who don't know you can pay off loans faster by paying more but to me, that's just stupidity. Also, saying if you "just" pay $10 more a day is freaking $300 more a month and acting like that's no big deal is ridiculous when the amount is already almost $3000/month. Must be nice to have that kind of money for housing
While I agree with your sentiment that it's difficult to come up with an extra $300/month. Change your mindset from "it must be nice to have extra money" to "what do I need to do to bring in an extra $x a month".
I didn't have the extra money at first but after thinking strategically about what I needed to do, I started a side hustle, stopped spending on crap that I didn't need, and enjoyed free things around the community with my kids.
@@crystalg81 With enough "lifestyle creep," what was previously "an extra $300/month" ceases to be _extra_ money (no matter its source) - as the transition from renting a cheap apartment to mortgaging a $450K, single-family home would demonstrate.
@@Mark-4158 ain't that the truth!
It's definitely a challenge.
A lot of them don't take into account that inflation is 2-3% at minimum each year so in 30 years the loan would be worth significantly less compared to if you throw all your money at it just to have peace of mind. An expensive as heck peace of mind.
ANY amount will help. Doesn't have to be $10 a day. Pay $10 a month if/when you have it. Every dollar of reduced principal is greatly multiplied in reduced interest in the future.
"I can pay it off faster if I pay more than a third more per month than I have to. Totally feasible! groceries don't exist!"
The video gives a terrible example but you can pay literally ANYTHING extra (even a dollar) and you are saving 30 years interest on that dollar. Pay $10 extra or $100 extra per month and watch the principal come down year after year. That's money you no longer have to pay interest on.
A Mortgage is the real Death Note.
Remember that kids.
Make sure you read the terms. Some lenders put early pay off penalties in so they can still get more out of you if you try to pay off early. It's often worse with car loans as it is a known strategy to sign up for financing and then pay the car off completely at the first payment. People do this because some dealerships will offer a lower sale price if you take their financing.
The fact that most people not knowing this is true is just sad. This is just basic maths everyone learns in middle and high school…
I don’t think it’s about the Math. It’s more about people not realising they even have the ability to overpay without penalty. A lot of personal loans don’t allow that
It's not about ppl not knowing like you said it's simple pay more towards anything and you'll pay it off quicker. It's about ppl not being to to do it financially so they just don't
@@alfredjones4925 again, for a lot of people they don’t know you can repay mortgages. A lot of loans PENALISE you financially for paying off quicker. That’s my point
Do you.. think it’s about the math?
@@hooky17so…. Math
$300 additional per month so just over $3100 a month on a mortgage. Let me just pull that out my arse right quick.
If you are able to pay 2800 than you can also pay 3100. You probably have to make 6000 bucks a month after taxes to make each of these payments reasonable. So these extra 300 are basically one hour of paid over time per week and packing your own lunch instead of buying something
Great advice! Even $100 a month can make a big difference. Some loans have a pre-payment penalty. Check in on that when getting a loan. FHA and VA loans are not permitted to have prepayment penalties.
Paying off my home mortgage was one of the best financial moves I ever made.
As a loan originator I make sure my borrowers know how they can pay off their mortgages faster...
Yep mortgage, student loans, insurance. All the same. This country don’t care about you. Anything with interest is bad news
Easy access to debt is absolutely necessary to become a developed country. If only wealthy children could afford college, and everyone needed to save 20 years to afford a home, our standard of living would be 10% of what it is today.
It’s not about the math…Many people are ignorant when it comes to finances in general. Many don’t even know the process to purchase brick and mortar which never truly own… Be the difference and Educate
The people who say 'You don't own your house outright if you have to pay taxes on it' usually don't own a house. When I am done paying off my mortgage (in 2 years and 18 years early due to excessive extra payments), my house expenses will be $400 a month for a 3 bedroom ranch with central A/C and garage.....show me a house for rent like that for only $400 a month, and I'll sell my house and move into it. When you rent, you are paying the taxes for the landlord/owner.
For those having a different mortgage amount, you need to make approximately 13 mortgage payments in a year. To save 6 - 7 years. That's an extra payment of principle and interest and does not include taxes and insurance.
Good luck doing that when you're dropping over 25k per year in daycare costs
@@matthewm9261 everyone doesn't have children.
Day care cost are not forever.
That is about $300 a month on an already high payment. You can achieve the same results by making bi-weekly payments on your house or car. Here is the math: the payment is 2873.00, if you pay bi-weekly you will make a half payment every 14 day. Twice a year you get paid 3x in one money. This mean you will make 13 mortgage payment in a 12 month period. This also means you will have a full payment each year going toward principle.
You ACTUALLY OWN YOUR HOME AT CLOSING SIGNING. The Bank acts as a Fudiciary Trustee and accesses you Cestique Trust for the purchase amount. The Banks commit fraud by making you pay the money and interest.
Don’t make your tax payment and see who “owns” the house.
lets get a good example with a car loan! Same theory!
I started out with a 30 year mortgage. A friend then told me that I can afford the extra amount for a 15 year mortgage. I changed it to a 15 year mortgage and finished paying the house in much less time. It really was not a bother.
And if you invest the $10/day in the S&P you can pay it off even faster
Correct. If you invested the money and got 9% returns, you could pay it off 19 months earlier and save an extra $3k in interest. But as you can see, the difference isn't much and your investment returns aren't as guaranteed as simply paying off your mortgage early.
The stock market gains aren't guaranteed....the money you save on interest due to extra payments are guaranteed.
@@formula112967 over any extended period of time, they basically are
Fun facts….pay $20 per day extra and you’ll own the house even sooner and pay less interest!!!!! No Way.!!!😮
Im sure if you're purchasing a house, this info is not new! The issue is that people are struggling to pay their mortgages, therefore, they have no extra $10/day
Get that -- $10 a day, not month.
Yep, $300 a month. Like everyone has that laying around. 🙄🙄🙄
You should@@MobileGamingChronicles
You'll need to specify that the overage is to pay down principal, not interest or other fees.
Nope, all payments by default within a time period go to base
@@jtowensbyiii6018 that is not universally true. I've seen mortgage contract terms that allow the mortgagor to apply the funds as they see fit, which is not limited to arrearages.
Thanks for sharing such great information!
Right now in these times I'm enjoying writing off all the interest. Thank God I bought my house 22 years ago before houses got ridiculously expensive
I was taught you either pay the most you can, or leverage a Line of Credit. Paying the minimum is NEVER the right choice.